Middle East loop set to deploy 20,000 teu ships for the first time

Ports in the Middle East are set to receive 20,000 teu ships for the first time on a regular loop from Asia. Ocean Alliance, the container shipping grouping between CMA CGM, Cosco, Evergreen and OOCL, recently revealed its service changes, effective from April. The Asia – Middle East MEA5 loop will be up-sized to ships of 20,000 teu.

“For the first time ever, container ships of this capacity are thus used outside of the Asia – North Europe route,” Alphaliner noted in its most recent weekly report.

Despite the substantial upgrade of the MEA5, overall Ocean Alliance capacity on the Middle East and Red Sea routes remains unchanged compared to last year’s outlay.

The current MEA5-PNW2 pendulum is being decoupled, allowing the upgrade of the MEA5 service to the 20,000 teu scale using seven ships from Cosco.

Eastbound calls at Port Klang and Qingdao are added, at the expense of Singapore, Cai Mep, Hong Kong and Yantian which are dropped.

Commenting on the news, Andy Lane from Singapore-based CTI Consultancy suggested the move could usher in another freight rate war.

“Upsizing services is only bottom line beneficial if you can continue to fill them with good revenue cargo. You do also sacrifice port-pair coverage and sailing frequency. I think that the Asia-Middle East trade is not yet of sufficient scale to host 20,000 teu ships, and a likely outcome is overcapacity and a race to the bottom on rates, at least short term,” Lane told Splash.

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.